Ethiopia to Present Projects for Russian Companies to Make Up for $5 billion Debt

MOSCOW (Sputnik) – In late April, Russian and Ethiopian foreign ministers met in Moscow and discussed the issue of outstanding debt relief.

Russia has been writing off Ethiopia’s debt since 1998 which at the time stood at $5 billion.

“The Russian Federation agreed to cancel most of the debt that we had and the remaining $126 million we agreed with the Russian side that we would use that provided that Ethiopia presents viable projects to be used by Russian companies,” Grum Abay Teshome said.

According to the ambassador, Ethiopia is already finalizing the list of these projects.

“They are in the engineering area, science and technology and innovation. Once they are finished we will present them to the Russian side. I think they will be presented before September,” the ambassador explained.

Russian companies need to be active in the market of the Ethiopian development projects as they face competition from Chinese firms, the Ethiopian ambassador said.

“They [Russian companies] have to be very active because the Chinese are there and are trying to take almost everything. The Chinese have always been around, but we want to diversify some of the infrastructure projects,” Grum Abay Teshome said.

According to the ambassador, Addis Ababa needs Russia’s technology and expertise. Gazprombank, one of the largest banks in Russia, and the Inter RAO energy firm are looking for expanding their operations in the country, he said.

“They [Gazprombank] are also interested in stretching to gold mining, and agro-industrial complexes also. That is going well… Inter RAO is engaged in renovating some of hydro stations that Russia and the Soviet Union built in the country,” the ambassador added.

In 2011, Inter RAO created a subsidiary to work on equipment deliveries for power plants abroad, with Ethiopia being one of the priority countries. The company launched a tender for a survey and evaluation of the technical condition of equipment of the Malka Wakana hydropower plant three years later. The plant was built by the Soviet Union in 1988.

In 2014, a subsidiary of Gazprombank and the Ethiopian leadership signed an agreement on production sharing at a promising hydrocarbon field in the country’s north. The Russian bank reportedly intended to spend some $2 million on the project.